The emergence of strategic management

As an area of knowledge, business administration covers a wide variety of fields that contribute to our understanding of the management of firms, such as marketing, finance, accounting, human resources, operations, and strategic management. Since business education quickly spread in the mid-twentieth century, undergraduate and graduate programs have traditionally included some courses in strategic analysis and implementation, though their names, contents, and methods have evolved through time. Let us begin this investigation into the core questions about the theory of the firm in strategy with a brief review of its evolution as an academic field.

The origins of strategic management can be traced back to the core course, usually called Business Policy, which used to be part of most programs until it was changed to Strategic Management in the late seventies. Following the lead of Harvard, this course provided an integration of the different functional areas from the perspective of the general manager. One influential early textbook claimed that business policy was the study of the responsibilities of senior management, the crucial problems that affect the total enterprise, and the decisions that determine its direction. This approach relied heavily on careful analysis of real business cases that was presumably valid only for the specific organization that was analyzed. Strategic management was mostly considered an art that requires analytical skills rather than a science to be expanded through empirical testing.